Microsoft’s New $29 Smartphone Could be a Cheap eReading Device But It Isn’t All That Cheap

Many electrons are being slayed today to tell readers about Microsoft's new $29 feature phone, but I'm less impressed than most. While the $29 Nokia 215 is a very pretty phone and is supposedly created for the developing world, I'm not sure that it will be cheap enough to draw attention - not when there are even cheaper options readily available.

It costs just $29 pre-tax and is aimed at emerging markets, offering customers 29 days of battery life on standby, a dual-SIM option, a built-in torch, and FM Radio. There's also a 2.4-inch, 320 x 240 display, a 0.3-megapixel camera, and Bluetooth connectivity. Crucially, however, Microsoft say the 215 is their "most affordable Internet-ready entry-level phone yet," offering the Opera Mini mobile browser and a limited array of pre-installed apps including Twitter, Facebook, Messenger, and Bing Search.

I had initially planned to cover this as a possible cheap ereading device, but as I got to thinking about it I realized that this wasn't a very cheap phone.

It's not just that Nokia/Microsoft also has a $19 model which is much less capable, but also that I know that I can buy a feature phone for only $9.99 right now. It's the Samsung S150G from Tracfone, and while it is far less capable than the new Nokia 215 it is also a lot cheaper. (What's more, that is the US price; the price in the developing world could be even lower.)

"Cheap phones for the developing world" is a hot topic right now. Everyone is writing about them, and most of the major tech companies are talking about making them.

But they're really not all that cheap - not unless you're judging the price by first world standards.

The last time I wrote about cheap phones, it was the Android One reference design in June. That phone was supposed to be amazingly cheap at $100, but one commenter pointed out that in reality it was no cheaper than smartphones which were already on the market (thanks, jjj!).

And the same is true today.

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Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

Truth is that the dumbphone is dead, was still alive a couple of years ago but now it’s done. Smartphones are getting cheaper every day. The real barrier is not even the price of the device anymore , it’s the voice and data plan. A consumer can make an effort to buy a device but paying for the plan can get tricky. Last year and 2 years ago pushing the price lower was a thing but now it’s already low and keeps going lower. Sure some computer illiterate old people might still buy dumbphones but no real reasons left for everybody else to do so.

What’s more, that is the US price; the price in the developing world could be even lower.

Err, no. The reason it’s $10 is because it’s locked to Tracfone, who follows the razor blade model (the blades being minutes in this case). It’s fundamentally unfair to compare the price of a locked and subsidized S150G to an unlocked and unsubsidized 215, even before we address the (huge) difference in capability. Consider that the variant for T-Mobile (Samsung SGH-T199), who charges less per minute, costs $20.

As it so happens, T-Mobile’s device is also locked. Samsung doesn’t appear to sell a completely unlocked version of the S150G in the US, but it would be reasonable to suppose that an unlocked version would cost more than the $20 that T-Mobile charges. In that light, the 215 looks like a much better deal.

The $20 for 3 months gets you all of 120 minutes, assuming you get in while the Double Minutes for Life promo is active. That works out to be a whopping $0.17 per minute. If not, it becomes an unholy $0.33 per minute.

T-Mobile charges you $9 for the same period with 30 minutes/month. Additional minutes cost $0.10 per minute, which is still pricey but considerably better than Tracfone.

Back-of-the-envelope math shows the break-even point between the two phones is around 150 minutes. That is, once you’ve used the phones for 2.5 hours (lifetime, not per month!), every additional minute you spend talking on Tracfone vs. T-Mobile costs you extra money.

Tracfone makes oodles and oodles of money buying minutes at wholesale rates from the major carriers and then turns around and sells it at heavily marked up prices. There’s plenty of revenue in there to subsidize phones.

The real issue for the emerging markets and e-reading is availability of ebooks an the ability to pay for them/

MS is way ahead of the game in carrier-billing, along with Google Play.

With sixty global ebook stores Google Play stands to gain the most in the e-reading and games fields.

Apple’s 50+ stores are focussed on Europe and the Americas, bizarrely leaving out the biggest growth zone, Asia. Kobo’s potential international reach is limited buy its lack of localized stores and partner stores, which are theortetically its biggest strength.

Amazon is still too busy surcharging the few countries outside the Kindle zones that it does serve, and again blocks downloads to the biggest growth zone. What’s most worrying is that its senior execs responsible don’t even know it.

I’m old enough that I find the amount of data you get with just about every smartphone plan fails to satisfy my personal value equations.

In fact, I just switched to a prepaid T-Mobile plan, with a one-cent SIM and a $24 “Blu” phone. Likes: big lit buttons, straightforward operation, long battery life, not having my contacts *in the cloud*, and not having a contract.

But I also don’t have major work demands for my connectivity. If I did, I wouldn’t be footing the bill, I can tell you that.

Many “low-cost” prepaid plans are killers if you measure by the minute. If, however, you are not a power-talker, they can be a bargain.

My husband’s Virgin Mobile paylo voice plan (no longer offered) only demands that we “top-up” $20 a quarter. But the paid-for time is rolled over (apparently forever). If he felt the need to start chatting up a storm on it, he’s well-cushioned now, with some $200+ in (admittedly expensive) minutes. We know it’s not a wise plan for a chatty Cathy, so the bottom line ($80 a year; the Kyocera locked phone was < $15) suits us.

That’s a pretty big if. The target audience of Tracfone is people who have low/no credit and/or can’t afford the mainline $50/mo or more plans. Instead, they go cheap, and when all the minutes are used up, they fork over another few bucks for another handful of minutes.

You don’t net $200 million in a year on 7.7% of revenue by cornering the not-power-talker market.